Goldman Sachs Invests in Last-Mile Specialist

Elion Partners is the recipient of a strategic investment from the firm's Vintage Real Estate Partners II fund for a vehicle that largely focuses on logistics assets.
Juan DeAngulo, Managing Partner, Elion Partners. Image courtesy of Elion Partners

Elion Partners has become the recipient of a strategic investment from Goldman Sachs Vintage Funds in an Elion-sponsored investment vehicle that holds an existing portfolio of last-mile logistics real estate.

READ ALSO: Infill Logistics Demand to Last: Report

The investment will let Elion’s vehicle continue to target logistics real estate in strategic infill locations in high-growth urban markets. The amount of the investment was not disclosed, and an Elion spokesperson was unable to provide Commercial Property Executive with additional information.

In May 2020, Goldman Sachs announced that it had raised its second dedicated real estate secondaries fund, Vintage Real Estate Partners II, with about $2.8 billion in capital commitments. The fund invests globally in both traditional real estate limited partnership interests, as well as more complex structured and non-traditional secondary transactions.

The investment follows a period of expansion for Elion, on more than one front. Elion has recently assembled a portfolio totaling more than 3 million square feet in strategic infill locations across core U.S. markets, including six distribution buildings acquired just this year. In April, the firm expanded to the West Coast with the hiring of Seattle-based Senior Managing Director James Lambert, who joined Elion from Amazon Logistics. As a vertically integrated firm, Elion owns and operates logistics assets in closed-end fund structures and permanent capital vehicles. 

Supply chain changes

In a prepared statement,  Juan DeAngulo, an Elion managing partner, noted that the pre-pandemic trends of “e-commerce adaptation and the need for supply chain onshoring … have been accelerated, which have combined with the emergence of increased inventory levels as companies look to mitigate future volatility risk.”

Earlier this month, an Elion Partners report contended that the sudden shock of the coronavirus pandemic revealed weaknesses in an e-commerce–driven supply chain that had already been expanding rapidly. The report called for greater supply chain resilience through approaches such as “buffer stock,” that is, keeping more product supply closer to end-users, typically in infill locations.

In February, Elion Partners acquired a 158,000-square-foot last-mile distribution building in Deerfield Beach, Fla., for $22 million. Just 12 months prior, in a joint venture with Buchanan Partners, Elion had purchased a 34-property, 1.6 million-square-foot industrial portfolio in metro Washington, D.C.